EUAA Submission: Draft Amendments To Transmission Efficiency Test & Revenue Determination Guidelines For Non-Contestable Network Infrastructure Projects
Emily Wood | June 5, 2024
‘….
- The EUAA supports the AER developing a Position Paper in the first 60 days after submission by the Network Operator, instead of a Draft Determination, or as per ISP contingent projects, no report. We believe that the timeframe required to develop the Position Paper while allowing for consultation and a determination does not allow for AER to develop a considered Draft Determination,
- Likewise, we consider the ISP contingent project approach of no paper for non-contestable projects to be below the level of transparency required by consumers for State based political schemes. e. In developing the contingent projects presented in the ISP, consumers are consulted.
- The EUAA considers that the 15 business days (or 3-weeks) for consultation on the Position Paper is below the preferred 4 weeks provided under the ordinary processes, however we understand that the truncated consultation period only allows 51 business days (or 10 weeks) for the AER to consider submissions and decide. Our preference is for the normal 4 weeks, however without the NSW government changing the legislation to allow a longer period, we support the shorter consultation period proposed by AER.
- Due to the nature of non-contestable projects, EUAA supports the AER prioritising its assessment time on the cost component of the application, given that the cost component will likely not be derived from a competitive assessment process nor determined using a competitive contractual process by the Network Operator. We believe that the AER is best placed to test the efficiency and prudence of non-contestable costs, and it is under the AER’s advice that consumers can feel comfortable that Network Operators are not “gold-plating” an investment.
- The EUAA supports the amendments to section 3 of the Guidelines (pre lodgement) to ensure
- That the Network Operator consults with stakeholders prior to lodging its application to the AER, with consultation to be consistent with the AER’s Better Resets Handbook, and requiring the Network Operator to raise issues from stakeholder consultation with the AER as soon as the Network Operator is aware of issues.
- That the Network Operator provides a cost allocation methodology for AER’s assessment prior to lodgement of the application. While we disagree with the requirement of the AER to provide an initial determination of the cost allocation methodology within 30 days of receipt (or the allocation methodology is assumed to be approved), we understand that this is a requirement of the EII. We would welcome discussions with the AER at this step to discuss the cost allocation methodology from the perspective of large consumers….’
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